The Australian dollar reached a nine-month low against the US dollar on Monday, causing global investors to become uneasy as another major Chinese investment firm exhibits signs of financial strain.

The Australian dollar dropped to 64.59 US cents before recovering slightly to 64.8 US cents later in the day.

This decline has extended over four consecutive weeks, attributed to the Reserve Bank of Australia’s cautious stance, apprehension about China’s situation, and a robust US dollar, according to Sean Callow, senior currency strategist at Westpac.

Australian dollar may fall below 64 cents

Callow suggested that the Australian dollar may fall below 64 cents if investor apprehensions intensify about China’s property market or if the upcoming July economic activity data disappoints.

China’s economic stability has been a recurring concern, as data reveals disappointing bank lending, credit, exports, imports, and price indices.

These issues have not been fully addressed by policy measures, raising uncertainties about the future of the world’s second-largest economy.

ALSO READ: Australia advances to women’s world cup semifinals with penalty shoot out win over France

Amid this scenario, the Australian dollar also faces pressure from declining commodity prices, particularly iron ore.

As global financial markets experience a “risk-off” atmosphere due to investor anxieties, the Australian dollar’s performance serves as an international investment risk indicator.

Looking ahead, experts predict a potential upward trend for the Australian dollar over the next year, driven by a weakening US dollar and potential rate cuts by the US Federal Reserve.